ServiceNow CEO Bill McDermott looks on during an “Investing in America” roundtable discussion with U.S. President Donald Trump in the official dining room of the White House on June 9, 2025 in Washington, DC.
Brendan Smialowski AFP | Getty Images
ServiceNow After the bell on Wednesday, the stock fell more than 3%, although it beat Wall Street’s fourth-quarter expectations.
Here’s how the company performed compared to LSEG estimates:
Earnings per share: 92 cents adjusted, 88 cents expected; Revenue: $3.57 billion, $3.53 billion expected.
Sales increased 20.5% from $2.96 billion in the same period last year. Net income was $401 million, or 38 cents per share, up slightly from $384 million, or 37 cents per share, in the year-ago period.
“We hope these results continue to demonstrate the strength of our business and the fact that we are truly unique in the software space,” Finance Director Gina Mastantuono told CNBC.
The board also approved an additional $5 billion for stock repurchases.
ServiceNow expects subscription revenue of $3.65 billion to $3.66 billion in the first quarter and $15.53 billion to $15.57 billion in fiscal 2026.
The enterprise software company said its acquisition of artificial intelligence company MoveWorks will contribute 100 basis points to full-year and first-quarter subscription revenue growth, as well as current remaining performance obligation growth in the first quarter, which accounts for the backlog.
The company is in the midst of a major spending spree to beef up its AI and security capabilities as it positions itself as the enterprise’s “AI command center.”
The surprise deal has raised some concerns about whether the company is considering acquisitions to reinvigorate growth, especially as concerns grow that the software sector is losing momentum to AI.
“Our acquisition is not a 100% transition away from organic growth,” Mastantuono said. “They represent that acceleration.”
He said the company is making acquisitions to acquire key capabilities that unlock value.
Last month, ServiceNow announced it would acquire cybersecurity startup Armis for $7.75 billion and signed a roughly $3 billion Moveworks deal to strengthen its cybersecurity products and identity security platform Veza.
ServiceNow said subscription revenue, which makes up the bulk of its revenue, rose 21% year-over-year to about $3.47 billion in the same period, beating Street Account estimates of $3.42 billion.
Subscription revenue for fiscal 2025 increased 21% to $12.88 billion.
The Santa Clara, Calif.-based company’s current remaining performance obligations for the fourth quarter were $12.85 billion, up 25% from the same period last year.
ServiceNow also announced an expanded partnership with Anthropic to better integrate the Claude model for customers. Earlier this month, ServiceNow signed a similar three-year agreement with competitor OpenAI.
